The most commonly deployed 2G (GPRS/EDGE) ciphers have now been publicly broken, and the evidence indicates that they were once again intentionally left weak by the mobile industry designers. See this news coverage:
Here are a few details. At Chaos Communication Camp 2011, Karsten Nohl, Luca Melette et al. disclosed flaws in the GEA/1 and GEA/2 ciphers and released the open source gprsdecode software for sniffing GPRS/EDGE networks. It works in conjunction with the open source Osmocom GSM Baseband software implementation running on supported cell phone hardware, like OpenMoko or some Motorola phones based on the Ti Calypso Digital Baseband chip.
They also noted that some carriers don't even encrypt the data (i.e. using GEA/0) in order to detect the use of traffic or protocols they don't like, e.g. Skype.
GEA/3 seems to remain relatively hard to break and is said to be in use on some more modern networks. If used with USIM to prevent connections to fake base stations and downgrade attacks, users will be protected in the medium term, though migration to 128-bit GEA/4 is still recommended.
But GEA/0, GEA/1 and GEA/2 are widely deployed. So applications should use SSL/TLS for sensitive data, as they would on wifi networks.